Personal Loan vs Credit Card Calculator

What this calculator does

This tool compares two ways of paying down a credit card balance: keeping the balance on the card and paying it down at a fixed monthly amount, versus moving the balance into a personal loan and paying that loan's amortising monthly figure. Both options use the same monthly payment — the loan's amortising figure — so the comparison is like-for-like in cash-flow terms. The output shows the cheaper option, the total interest under each, and the number of months the credit card balance takes to clear at the matched monthly payment.

How the comparison is set up

The personal loan side is straightforward amortisation: the loan APR, the loan term, and the principal feed the standard amortisation formula to produce a fixed monthly payment and a total interest figure across the term. The credit card side takes that same monthly figure and applies it to the original balance at the credit card APR, computing how many months the card balance would take to clear at that level of payment and the total interest paid across those months. Because credit card interest accrues on the remaining balance each month, the time-to-clear and total interest are both higher than the loan equivalent when the credit card APR exceeds the loan APR.

Worked example

Inputs: 8,000 balance, 22% credit card APR, 8% personal loan APR, 3-year term. The amortising personal loan produces a monthly payment of about 250.69 across 36 months for total interest of about 1,024.87. Holding the same balance on the credit card and paying that same 250.69 each month, the card APR of 22% means the balance takes longer to clear — roughly 48 months — and accrues about 4,138 in total interest. On these inputs the personal loan saves about 3,113 in total interest. Change any input and the calculation rebalances.

What the methodology does and does not assume

The calculator assumes the borrower can sustain the same monthly payment under either option. It does not model credit card minimum-payment rules (which vary by issuer and jurisdiction), origination fees on the personal loan, balance transfer fees, or promotional 0% periods. It assumes both rates are fixed for the comparison window. The credit card side is a like-for-like total-interest comparison at the loan's monthly amount — not a projection of what would actually happen if a borrower paid only the card minimum, which would typically take much longer and cost more.

When the comparison flips

The personal loan is cheaper in total interest when the loan APR is below the credit card APR by enough margin that the amortising structure outpaces the savings the borrower might keep on the card by stretching out at the same monthly payment. When the two APRs are close, the cheaper option depends on the term — a longer loan term shifts the cheaper figure toward the credit card because more of the loan months accrue interest. When the loan APR is higher than the credit card APR, the credit card is the cheaper option at any term where both can clear the balance.

What this does not capture

Origination fees on the personal loan (commonly deducted at disbursement or added to principal). Balance transfer fees on credit cards. Promotional rates that reset after an introductory period. Variable-rate loans or cards where the APR moves during the comparison. Annual fees. Late-payment fees on either side. Specific local regulation on minimum-payment rules or maximum APRs. The calculator surfaces the rate and term effect; the rest of the cost picture should be checked against the specific loan and card agreements.